River Island could close 33 stores, seek reduced rents

(Sharecast News) - River Island plans to shut 33 stores and reduce rents at 71 others under a court-supervised restructuring plan due to be presented to creditors in August, it emerged on Friday. The move came as the retailer battled shifting consumer habits and mounting operational costs.

River Island, which operates around 230 outlets and employs roughly 5,500 people, is seeking approval to proceed with the plan in an effort to avoid formal insolvency proceedings.

Sources told Sky News that fresh capital would be injected into the business if the proposal is approved.

Ben Lewis, River Island's chief executive, was quoted by Sky as saying that the retailer's store portfolio no longer reflected customers' needs due to the rise of online shopping and sustained cost pressures.

"We regret any job losses as a result of store closures, and we will try to keep these to a minimum," he added in a statement issued Friday.

Founded in 1948 by Bernard Lewis, River Island remains privately held by the Lewis family.

The company, previously known as Lewis and Chelsea Girl, adopted its current brand identity in the 1980s.

Latest accounts for River Island Clothing Co showed a pre-tax loss of £33.2m for the year ended 30 December 2023, with revenue falling 19% to £578.1m.

In filings, parent company River Island Holdings flagged ongoing risks from supply chain disruptions, inflation, and heightened competition in the digital retail space.

The proposed restructuring mirrored similar strategies adopted by other UK retailers, including Poundland, amid an increasingly challenging high street environment.

Recent tax changes and weak consumer confidence had pushed several legacy brands - including Lakeland and the Original Factory Shop - to seek new ownership or restructuring options.

Reporting by Josh White for Sharecast.com.